Issue link: http://resourceworld.uberflip.com/i/638235
f e b r u a r y / m a r c h 2 0 1 6 www.resourceworld.com 47 a u s t r a l i a n u p d at e G r e g B a r n s A ustralia's second biggest state by pop- ulation is the state of Victoria and was built in the gold rush era of the 19th century. Over the past couple of decades enterprising companies have been devel- oping some of those old mining areas with excellent results. One of those companies is Newmarket Gold [NMI-TSX; NMKTF- OTCQX] which has two operating mines in Victoria, including its flagship gold mine Fosterville, near Bendigo, and Stawell. Newmarket Gold is run by Douglas Forster, however his team includes some serious heavy hitting mining names. Major mining investor Lukas Lundin and former Barrick Gold chief Randall Oliphant are directors and Vancouver-based financier Ian Telfer is a capital markets adviser to the company. In 2015, the company achieved record gold production of 222,671 oz gold and ended the year with US $36.5 million in cash as of December 31, 2015. Fosterville Gold Mine, the company's largest producer, achieved record produc- tion in 2015 of 123,095 oz gold, record grade of 6.11 g/t gold and record recoveries of 88.5%. The Fosterville Project was for- merly developed by Perseverance Mining around 25 years ago. It currently has mea- sured and indicated resources of 16,600,000 tonnes of 4.03 g/t gold for 2,151,000 oz; inferred resources of 6,300,000 tonnes of 3.72 g/t gold for 699,000 oz; and proven and probable reserves of 1,461,000 tonnes of 5.55 g/t for 182,000 oz in the underground mine and 441,000 tonnes of 8.89 g/t for 126,000 oz in the CIL residues. In addition to Fosterville and Stawell in Victoria, Newmarket has a third operating mine in the Northern Territory, the Cosmo Gold Mine. Newmarket Gold is estimating 2016 calendar year production of 205,000 to 220,000 oz amongst all operations including 110,000-120,000 oz from Fosterville. The gold grade for 2015 was 6.11 g/t and 2015 operating cash costs are estimated to be US $525-$575/oz. Given that the Australian dollar is tracking around AUS $0.70-0.72, Fosterville is a very good cash earner for Newmarket Gold. During 2015, Newmarket has invested significantly in exploration at Fosterville which resulted in the high-grade Eagle Fault discovery. The Eagle discovery has produced results such as 9.15 m of 386 g/t gold and 7.85 m of 268 g/t gold. The com- pany's September 14, 2015 announcement noted: "Drill results include continued intercepts of high-grade gold mineralization with the Eagle Fault discovery returning intervals of significant visible gold." Meanwhile Newmarket's Stawell Project, located in northwest Victoria, is a mature operation but with some expansion capac- ity. The company is aiming to produce around 35,000 oz in 2016. Newmarket Gold is looking to extend the mine life at Stawell and its 2015 drilling program has yielded a significant new discovery at the Aurora B deposit with results such as 7.06 g/t gold over 17.80 m and 8.03 g/t gold over 8.8 m. Open cut project possibilities at Stawell have been politically difficult for Newmarket's predecessors so it is likely it will look to fur- ther the underground operations. Newmarket Gold's newest mine, Cosmo Gold Mine, in the Northern Territory is another brownfield site with an expansion opportunity at depth. Cosmo is forecast to produce 60,000-65,000 oz for calendar year 2016. Drilling has revealed expansion opportunities with results such as 7.42 g/t gold over 4.3 m and 6.59 g/t gold over 6.4 m. The company is encouraged by these results and is embarking on a 2,000 m drill- ing program to identify the down plunge potential. If successful, this drilling will add significantly to the mineralization of the Cosmo deposit. n newmarket Gold achieving record production Newmarket Gold's Cosmo Mine in the Northern Territory of Australia. Photo courtesy Newmarket Gold Inc.